6 Lies That Broke People Believe

I grew up poor. Really poor. Without the help of the welfare system, our income for EVERYTHING after the mortgage payment would’ve been $50 a month for my mom to raise 3 kids on. Being broke sucks. It’s tough, both on adults and on kids, not knowing where your next meal will come from or if there’s a snowball’s chance in hell that you’ll be able to pay the rent each month. Because of the turmoil I suffered as a poor kid, I resolved at an early age to never be broke. But I was broke, for a good portion of my adult life. I’m still recovering from the lies I believed and the mistakes I made regarding money. As such, I’ve finally pinpointed some of the lies that make and keep people broke. Today we’ll talk about the lies that broke people believe, and what to do about them.

Lie #1: Being Rich is About Having “Stuff”. For years I equated my family’s poverty with an absence of stuff. All I saw was that we didn’t have most of the stuff that everyone else had. Therefore, my initial goal as a teen, when I promised myself that I’d never be poor again, was to have stuff, and lots of it. I wanted the cool clothes, a nice car, a cell phone (only the wealthy had cell phones back then) and whatever. So I got stuff. And more stuff. And more stuff. The problem was that I was still broke, continuing on the legacy of poverty that I’d lived with as a child, and I didn’t understand why.

The Fix: It wasn’t until I read The Millionaire Next Door: The Surprising Secrets of America’s Wealthy that I started to understand that truly wealthy people don’t waste their time and money on the accumulation of “stuff”. Smart wealthy people are wealthy because they realize that stuff is not nearly as important as the peace of mind that comes with not having the worry of money rule your life. Warren Buffet, one of America’s richest men, lives in the same 1950’s rambler he’s lived in for over 50 years. Why? Because he just doesn’t give a crap about what people think about his house. He has more important goals in life than the accumulation of stuff and the worry about what other people think.

Lie #2: My Money Situation is Out of My Control. I spent decades thinking thoughts like “If only we made this much more money, then things wouldn’t be so tight” or “If we had so-and-so’s income, we’d be debt free and living high on life” and other similar excuses. Then I learned what is possibly personal finance’s most prominent mantra: It’s not how much you make, it’s how much you keep. This rule of living below your means was new to me. After all, I had assumed for years that wealth was about having a lot stuff or making enough money for years. Suddenly, I was hearing stories of people who were living on $7,000 a year and loving life. It was then that I realized that we couldlearn to take control of our financial future. This new knowledge was a double-edged sword, however. In one way, it gave me hope; in another way, it forced me to face up to the fact that our financial problems were of our own doing. We had no more excuses. Although this was a scary revelation, it also gave us the foundation to turn our financial life around.

The Fix: Accept the fact that much (maybe not all, but much) of your financial problem has stemmed from the unwillingness to believe that you have control over your situation. No one makes you buy this, that and the other thing. Make a conscious choice to never again fall for the lie that you are destined to be poor and that your money situation is out of your control. Then choose to start educating yourself on how to properly manage money. Get books on the library, or read the many personal finance blogs gracing the Internet. You CAN do this, but you have to accept responsibility for your current situation first, and be willing to learn how to change things second.

Lie #3: I Don’t Deserve to/I’ll Never Be/I Don’t Know How to Be Financially Well-Off. SO much of financial management success is mindset, my friends. In a lot of ways, being broke was comfortable to us because it’s all we ever were. We didn’t like it, but we were used to it. This doesn’t make sense to people who have never been poor, but when you’ve spent decades being broke, and when most people around you are broke, it’s uncomfortable to think about truly being financially secure. Fun to dream about, but scary to actually pursue.

The Fix:Stop selling yourself short. No one deserve to live in abject poverty all of their lives. Don’t fall for that lie any more. The many professional athletes, actors, musicians and “regular joes” that grew up in poverty and changed their lives around are proof that you deserve better, and that you can turn things around. Start believing in yourself and your dream to be financially secure.

Lie #4: If I Try to Be Wealthy, I’ll Fail and Look Ridiculous. This is another one of the lies that broke people believe. When you spend years living broke, the ability to dream and envision success usually has no place or part in your life. The thought of believing in a dream – even one as simple as financial security – and the subsequent thought of failing at achieving that dream, is more terrifying than simply staying broke.

The Fix: Changing one’s financial picture so drastically is a scary thing. Start slow. First, learn how to budget and live within your means. Learn how to track your spending and commit to doing it 100% of the time. Pat yourself on the back for each success, and resolve to learn from each failure. As the old saying goes, the only people that truly fail are the ones that never try. You can do this, my friend. Resolve to learn how to stop being broke, no matter how long it takes or how many mistakes you make on the road to financial stability.

Lie #5: Wealthy People are A**holes. The broke sector of society often trashes wealthy people. They incorrectly assume that all wealthy people were born with a silver spoon in their mouth and that they must’ve either inherited their wealth or accumulated it by stepping on the backs of broke people just like themselves. In my research on truly wealthy people, I’ve found that 90% of truly wealthy people got wealthy by working their tails off, by educating themselves about money and how to manage it, and by living a lifestyle of generosity.

The Fix: Study truly generous wealthy people that you admire. Pick out causes of your own (make a list) that you will give to when you’re in a better place financially. Then resolve to become financially secure for the sake of those you want to help. There’s an old saying that goes “Money doesn’t change a person’s personality; it magnifies it.” In other words, a guy who is a jerk and rich was a jerk before he was rich too. Money is an inanimate object, a tool. It can’t make you – or anyone else – be an a**.

Lie #6: Becoming Financially Successful Will Take Too Much Time/Be Too Much Work. It’s not an easy task, going from a broke lifestyle to a financially secure lifestyle. It takes time: time to educate yourself, time to implement changes in how you manage your money, and time to learn how to live like a person heading toward wealth.

The Fix: Any goal worth having is worth working for. Imagine your life 5, 10 or 15 years from now: Do you want to be dealing with the same money struggles you’re dealing with now? Do you want to be in the same place: living paycheck to paycheck, struggling for every dime, a decade from now? I’m guessing you don’t. Yes, it does take time and patience to learn how to have a healthy bank account, but it’s sure better than sitting in the same awful life of payday loans and high interest debts that you’re living now. Decide for yourself if the effort will be worth the new, financially secure life you’ll have by taking a leap of faith and working toward a better life. You can learn to manage money properly. You can learn to earn more income through a second job, a side hustle or through starting your own business. Is this a daunting task? Probably. Especially if these types of achievements are new to you. But you can do it. Don’t sell yourself short, and commit to beginning a course in taking control of your financial life. You got this, my friend.

When we began our journey to dump our debt two years ago,we started with a debt amount that was huge, and an income that is not by any means “wealthy”. It was a daunting and discouraging picture to look at. But the journey of a thousand miles begins with a single step. Two years later, we are still taking steps to get out of debt. We still have a lot to pay off. Why do we keep going? Because the numbers are going down. Slowly, but surely. And that’s a whole lot better than staying where we started at. One day, we will reach debt freedom, and on that day, I know we’ll say how glad we are that we took the necessary steps to change our situation.

**Update: It’s now been four years since we started our journey, and things are going famously. We’ve had ups, and we’ve had downs, but we are almost there!

86 comments

So very true. Growing up my parents were very frugal and I always thought that the kids with fancy sneakers, cable television in their own rooms, and other cool stuff were rich. While I continued to think that to a certain extent when I started working and had money to spend, fortunately I was still pretty good with money and saved. But I’ve now come to realize that stuff does not equal being rich, and The Millionaire Next Door is an excellent book. I also agree that many people think “if I only made more.” My co-worker who makes decent money just said that recently about getting a raise…even though every previous raise that he’s gotten hasn’t really improved his financial situation.

So many good points in this article, Lauri, I can’t begin to point out the truth of them all. Lie #5 – as a child, I can remember my mother always mentioning that rich people were probably crooks, or cheats. There were many people she disliked simply because they were rich, when in fact she never even knew them that well. Interestingly, as she accumulated more wealth and got to know the very same people better, they seemed to become more honest and honorable as she aged. 😉

My mom shaped my attitude toward money, probably in ways she never anticipated. But there are two things she always said that stick in my mind and influenced my belief system to this day. The first thing she always said is in my mind a fairly negative way of thinking, although at the time she thought it was the right, perhaps even Biblical, way to think. She always said (and still does) “I never aspired to be rich.” As I look back at it now, I think it was a defense mechanism she used to justify being poor. Wanting money was not a spiritual desire. And by saying she never wanted to be rich, well, she could always get her wish if she never became wealthy. She still says that even though she did go on to attain a decent amount of wealth.

The second thing she always said is somewhat more inspirational. “We are rich, someday we’ll have money”. I never understood that phrase as a child but now I do. Riches aren’t just in terms of money. Riches are also health, adequate food and shelter, a loyal and loving family. I am so fortunate that for the most part I have those kind of riches as well as money.

Someday, perhaps in the time depicted in Star Trek, The Next Generation, we may not need money for things. Perhaps we all will have the replicator to produce our food, clothing etc. But until that day happens, we will always need money. How people think about money will dictate how they live. It is good to get the right mindset early.

Great post and well put!
As someone who also grew up in a super poor household, constantly worrying about money, food, bills, etc… I understand where you’re coming from. It took a lot of mindset changing to get okay with the fact that I am now living comfortably financially secure and able to retire (if all goes well) at 42-43 and not have to worry.
Realizing most of our poverty was my parents horrid spending habits and lack of discipline with budgets was key. After I got a great job and great income, realizing buying more crap doesn’t equal happiness, it just equals more crap filling up the house. I’ve been way more happy not making random internet purchases for that moment of feel good from buying something, plus it gave me more extra $$ to put towards FIRE. Again, great post!

Great post, Laurie! I grew up with a single mother and she also often seemed to have the attitude that rich people were awful. That colored my beliefs for a long time- when I was a kid I often though that if I grew up and had money that my mother wouldn’t like me. It’s really only been in the last few years that I’ve decided that I just can’t let thoughts like that hold me back. I’ve also made a firm policy of discussing absolutely nothing of our finances with my mother. There are some roads that you just don’t need to go down. 🙂

Great points Laurie, and surprisingly many of these things you list are about your approach and mental attitude towards money,if you can get your mind right about these things you can have success not matter what your income.

Very accurate about being poor, although it always sort of irks me that we try to address a society level problem through individual means. 🙂 I do sort of disagree with #5, though. There’s been plenty of studies on the empathy gap between the “haves” and “have nots.” This is supported by the fact that the wealthy give a smaller percentage of their income to charity than the non-wealthy, despite having a much larger percentage of their income being disposable.

The poor may give more, Ms. LOL, but that doesn’t mean that all wealthy people are jerks. Being a miser is a choice, not a requirement that comes with having wealth. I get what you’re saying about the empathy factor, I know that we think about the struggling in society a lot, having been there ourselves, and that it does impact our giving, but I also have spent many, many years working with the poor, and most of the ones I’ve worked with have made their own boats. I’ve also met and worked with several chronically poor families who’ve chosen to educate themselves and learn to manage money properly, leaving their chronically poor lifestyles behind. Society tends to lump all of the “poor” into the boat with those who truly cannot help themselves, and that’s simply a sad case of enabling. I guess what I’m trying to say (rather awkwardly 🙂 ) is that we do people a disservice when we label them as unable to change their situation, without first educating them on the steps it takes to change their situation and giving them a chance to try.

Your experience with how society as a whole views the poor is very different from mine, it seems. lol I turn on the television and it’s always about “lazy poor people” and “welfare queens.” It creates a sort of loop where some just want to take what they can from the system because why not? Sure, they could bust their butts and work three minimum wage jobs, but they’d STILL be looked down upon and treated as lesser, so why bother? Add to that the problems of racism and racial income/wealth disparity and it just becomes an overwhelming problem to put onto the shoulders of the individual poor person.

…I really, REALLY hate the “bootstraps” view, can you tell? lol Telling tens of millions of people to work hard and get better jobs is just so hilarious to me.

I just have to disagree, my friend. I’ve seen the stories. Many times people are disrespected because the behave in disrespectful ways, period. I grew up in welfareville, smack in the middle of a harlem-type neighborhood, being one of a handful of white kids in the neighborhood, just as poor as the rest of them. I saw most people simply using excuses to not work and to live off the system. But I saw a few who said “I want better for myself.” and did what needed to be done to get better for themselves. I read a story about one so-called “welfare momma” who started her own biz, buying used clothes and reselling them for a profit on Ebay. This woman earned enough cash to buy her and her kids a nice house in a nice neighborhood and she now makes several thousand dollars a month. When we tell poor people that they cannot help themselves, we are disservicing them and disrespecting them. Poor people, black, white or any other color, DO have the smarts to bootstrap themselves out of poverty unless they have some type of disability that prevents them from learning. I’ve seen them do it and become productive citizens of society now work to teach others the same. Let’s not sell them short of their potential.

Good point. I also get frustrated with the giving gap when you look at raw numbers, but as a guy who’s worked with non-profits for a long time, I’ve found our richest supporters have helped in awesome ways that studies like these can’t quantify. One woman gave us access to her entire company’s workforce. While she gave a small percentage of her income, we never would have raised tens of thousands of dollars without nearly her entire company helping us with events. Another gave us access to his association of other wealthy people. Not everyone gave, but in raw dollars we gained far more money by talking to a few rich people than we would have with a bigger percentage of poor people. A third person sat on our board and helped guide us toward the bigger pots of money. He wasn’t particularly big as a donor, but without him we wouldn’t have been able to move as effectively without his leadership.

Those gifts, none of which were monetary, added up to some remarkable contributions by wealthy people which helped our community.

Actually the fact that lower income people give more than the higher income is false. Jump over to Dave Ramsey’s website. He has great information to support this. It is so popular in our society to make people who have earned a living and built wealth as bad. People are good and bad by their actions. Money is not moral. Good people are poor and bad people are poor. Good people have wealth and bad people have wealth. Check out daveramsey.com.

The “too much work” one bothers me. Too much work? Less work solves everything…stay broke!

I do think that the #4 lie (I’ll fall and look ridiculous) is actually true, not a lie. You will fall. You will look ridiculous. The magic is not carrying about falling and seeing it as a lesson, not as a failure. I’m sure every rich person who built themselves up from nothing will tell you that they’ve looked really, really dumb several times. Big deal! 🙂

Well thought out article indeed, Laurie! I remember all of the bias against the rich when I was growing up. Even TV shows would show well-off people as being mean and selfish and obnoxious, but poor people were always salt-of-the-earth and somehow happier BECAUSE they were poor. What a load of malarkey. It’s just a lie fed to the masses to keep them down.

Laurie,
I think this is the best article you’ve written. We started our journey the same time you did January, 2013. Two years later, we’re still living on less than 1/3 of our net pay – the other 2/3’s is going right into paying off every last dime we owe. Sometimes we hit a wall, but we just keep going and I find it interesting that when we think about doing this for another year, it sounds like such a long time, but when we look back at the last 2 years the time actually flew by. Hmmm…. perspectives. Keep up the great work. You’re well on your way to “getting there”. Best wishes.

Jim, you are living on less than 1/3 of your net pay, and I’ll bet it’s something that you never thought you could accomplish three years ago!! Your story is proof that most times, there is help for those who want to be helped. Give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime.

Give a man a fish, you feed him for a day; teach a man to fish, you feed him for a lifetime! Love that! It’s so true.

Do you really understand what you’re doing? YOU are teaching a whole helluva lot of men/women to fish for a lifetime.

Generosity begets blessings and I know you and yours are being blessed in ways you’ve yet to even realize. Always count your blessings – especially those that you take for granted!

Love your blog! Write to me in 3 years and tell me that you and yours are sitting on top of the world. I know you will be – absolutely NO doubt about that. Yay! Good for you guys. We’re getting there too.

Really good points in this article, and I feel like #1 is the major point that a lot of people (me included) think at some time or another. There’s certain stuff that is valuable and helpful, but there is also a lot of “stuff” that serves the same purpose as the cheaper alternative!

I’ve also believed lie #5 in the past, but there’s also a lot of rich people that do amazing things. There’s plenty of terrible people at all levels of income, not something that is exclusive just to rich people.

Thanks for giving a perspective that isn’t always shared with no bias undertones. It’s always humbling to remember that everyone views their financial situations differently, and we are all at different levels of wealth–or lack of wealth–at different times in our lives.

I definitely believed that being rich was about stuff, and looking back I realize now that the acquisition of stuff just made me an unhappy person. I think I spent less than $100 in 2014 on stuff for me and it was one of my happiest years. I am glad that I was able to break the stuff cycle.

Great post Laurie! I’ve never been in that broke situation, but I have been through some tough times (after my divorce mostly). It was scary and I never wanted to be there again. But then I shopped my way back there only 2 years later. Now I’m done with it. I want to get this debt paid off and be done with it!

I think the biggest issue that many still believe that showing off jewelry or fancy clothing (whatever other ‘wealth’ status display) is the way to impress and that all people who show off are doing great.

My folks kept on badgering me for years to dress ‘like a lady’, since most neighbours thought I was unemployed or whatever else they had in their minds, seeing that I don’t look ‘well-to-do’. They were shocked to find out that I actually run a business and was able to afford some pretty looong vacations in the US (which for us here is at the end of the world).

Anyway .. family is important to us and our health. We try to save money and prepare for the future, we spend on things we care about and mind our own business overall 🙂

As you’ve seen for yourself, it’s really hard to get out of debt so as not to be broke. It’s much, much easier to blame someone or reason yourself into thinking it’s OK to always be broke and living paycheck to paycheck, but that is truly selling yourself short. It also sets up your kids to repeat the cycle. I’m so proud of you for breaking the cycle and making sure your kids know that stuff does not equate with happiness or wealth.

Laurie, your lies and fixes are very revealing. I believe that having positive thinking clears these lies off, helping us achieve our financial goals sooner and more easily. But sadly most people find it hard to make it a choice.

For many years I equated happiness with stuff. And while certainly some things do make me happy, I realize that a lot of what I bought was out of boredom or to impress people. One of the best things I ever learned (and yes, Shannon was the one to teach me) was that the things we buy should bring us joy. And I had the very sad and humbling realization that much of what I did buy did not bring me joy. And some things were purely bought to impress others or to make them jealous, which was something I was not pleased to discover about myself either. My relationship with money is still complicated at times but it’s improved a lot since I stopped believing the lies (pretty much all you mentioned) and take responsibility for my actions too.

Tanya, I went through the same exact stuff. So much of today’s society tells us that what we own dictates our worth. It’s a sad lie that keeps people broke. So glad for both of us that we are out of that cycle and onto better things. 🙂

Lie #3 is a really interesting one – and I think it’s one that many people don’t even know they abide by. We are within 6 months to a year (Lord willing) of being debt-free except for the mortgage, and strangely enough, I feel some discomfort about it. It doesn’t fit well with my current self-concept – which is that I’m bad with money and struggling financially. I think that many of us will have to work on our sense of identity before any financial success can take root.

WOW, Prudence – wise words, and I totally identify!!!!! Things have really turned around for us in the last month, and it’s an odd feeling, the calm that comes with financial security. We’ve both, for all of our lives, struggled with money. It feels strange and uncomfortable to not be struggling. We work every day to, as you said, change how we see ourselves and remind ourselves that we deserve financial stability, but it’s still odd.

My dad was a free spender (too free sometimes) and my mom was (and is) terrified of money-not having enough, fear of spending it unwisely etc. They divorced when I was young but I’m thankful I didn’t fall into either of their shoes. These days I think I have a more healthy outlook on money. I always hear dave ramsey say that money isn’t really ours, we’re just here to manage it wisely for god. I really like thinking about money that way.

This is great. We went from broke (broke families) to rich and it’s so hard to see so many people we know and love believing these lies.

The one that gets me is #5. Everybody spent so much time and energy hating the people with money. There were so many remarks and eyerolls that I was scared to tell my coworkers that I had a savings or anything because I was sure they’d hate me too.

I think many guessed at my situation when they realized that I didn’t pick up my check as soon as they came in if they were on my days off. I remember one lady looking at me like I had three heads when I mentioned, “Oh yeah, I gotta go get my paycheck.” three days after payday. And then she followed with a disgusted, sarcastic, “it must be nice….” Sigh.

I have found that “rich” people (my definition of rich has changed through the years too. Similar to your #1.) Most people that do well financially really do want to help. They don’t want to keep you down. They want to see you succeed. If only more people realized that. : (

funny story… when I was younger, I grew up lower middle class. I had a dad who was a truck driver and worked for a living. I remember making fun of my friend who was several years older than me for his khakis and polo shirts he wore because he worked at a software company. I was “too cool” for that with my retail job. He was wealthier than me growing up, and always wanted to be “from the other side of the tracks” if you know what I’m saying… anyway, looking back all I can think was “How stupid were we?” Making fun of the khakis and polos, when in reality it just meant he had a fairly decent entry level job just out of college… Silly silly. I think much differently now…

I believe it’s fair to say that there are a lot of myths out there regarding wealth. To discuss one’s personal finances has been taboo for so long that it’s no surprise the general populace are confused about what being Rich truly entails.

Lie #5 is and has been particularly damaging to the wealth-building community over the years. The way to beat it is to simply be the best person you can be on the way to building your own fortune.